Determine cash payback period for both location proposals

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Problem - Cash payback period - Wyoming Woodworks is evaluating two capital investment proposals for a retail outlet store, each requiring an investment of $1,000,000 and each with a five-year life and expected total net cash flows of $1,250,000. Location 1 is expected to provide equal annual net cash flows of $250,000, and Location 2 is expected to have the following unequal annual net cash flows:

Year 1 - $400,000

Year 2 - 375,000

Year 3 - 225,000

Year 4 - 175,000

Year 5 - 75,000

Required - Determine the cash payback period for both location proposals.

Reference no: EM132707029

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